Fast-food chain Pie Face is collapsed no more and its co-founder Wayne Homschek looks set to remain on the board after a deal to resuscitate the troubled franchise was approved by creditors.
Creditors have agreed to a deed of company arrangement that will lead to a new chief executive and a new chairman, the former federal Liberal MP Andrew Thomson.
But Mr Thomson is not coming in cold. He was a director of Pie Face when it collapsed last month, sparking store closures, job losses and lawsuits.
Creditors' meetings for Pie Face Pty Ltd, Pie Face Holdings and Pie Face Franchising were held on Tuesday in Sydney.
There it was agreed that investment fund TCA Global Fund Management will be paid $2 million from Pie Face, and in return will conduct a capital raising of up to $10 million in the US.
Major secured creditor Macquarie has released its charges over the company after being paid out by TCA.
In a deal judged as better than liquidation, unsecured creditors such as food suppliers are expected to be paid between 14¢ and 19¢ in the dollar, with payments starting in about two years.
Remaining debt of more than $20 million will be paid over time. Pie Face owes money to the Australian Taxation Office and employees.
Bruce Wookey, director of TCA Global Fund Management and new Pie Face director, declined to comment on whether Mr Homschek was involved in the TCA deal. He referred all questions to Mr Thomson, who was not available on Tuesday.
But Mr Homschek, a former Wall Street banker, is understood to remain as a director. Creditors were told Mr Homschek remained on the board because of his deep knowledge of the business.
Pie Face has focused on wholesale and direct retail sales since its collapse. Supermarket giant Woolworths is trialling the sale of frozen Pie Face pies at its stores, and Pie Face sells to Jetstar and convenience store business OTR.
It's unclear whether voluntary administrator Jirsch Sutherland followed up interest in Pie Face from Stan Gordon, the chief executive of Franchised Food Company, owner of food brands such as Mr Whippy and Trampoline.
Jirsch Sutherland did not respond to calls on Tuesday.
Pie Face once said it had a "cult reputation" and a "cool" and "edgy" brand. Founded in 2003 by Homschek and his interior designer wife Betty Fong, it had taken on Australia and the US (largely retreating from the latter), and store openings were planned for the Middle East, Japan, Korea and the Philippines.
Investors including retail entrepreneur Brett Blundy, Fat Prophets founder Angus Geddes and Rothschild Australia chairman Trevor Rowe poured more than $35 million into Pie Face over the past five years with hopes of a sharemarket listing. It is unclear how much investors have lost.
But Pie Face first met with Jirsch Sutherland in February and since its appointment the administrators have closed dozens of stores, cut about 130 jobs and written to landlords seeking rent cuts.
Insolvency firm Ferrier Hodgson was appointed last month by Macquarie as receiver over certain assets. These assets included bank accounts and control of the agreement between Pie Face and casino billionaire Steve Wynn, who invested $US15 million in Pie Face's US subsidiary in 2012.
A franchisee said when Pie Face collapsed that franchisees were battling network rents of up to 25 per cent of sales, higher-than-average costs of goods, royalties of between 7 and 8 per cent, plus bank costs and dropping sales. Others suggested the business was more focused on selling franchises and international licences than selling food.
Sales reports seen by BusinessDay showed declining year-on-year sales across NSW, Victoria and Queensland, with Pie Face stores taking an average $298,832 in sales from July to the week ending November 23.
Pie Face's first creditors' meeting revealed that weekly outgoings were exceeding sales by about $150,000 and there were intercompany loans of $33 million.